* Canadian dollar at C$1.2793, or 78.17 U.S. cents
* Price of oil rises 0.6 percent
* Bond prices mixed across steeper yield curve
TORONTO, May 17 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Thursday, pulling back
from an earlier near one-week high as oil prices rose and
investors weighed prospects of a deadline passing to reach a
NAFTA trade pact deal.
The price of oil, one of Canada's major exports, climbed to
a 3-1/2-year high on concerns that Iranian exports could fall
due to renewed U.S. sanctions and reduce supply in an already
tightening market.
U.S. crude prices were up 0.6 percent at $71.88 a
barrel.
U.S. House of Representatives Speaker Paul Ryan has said the
Republican-controlled Congress would need to be notified of a
new North American Free Trade Agreement deal by Thursday to give
lawmakers a chance to approve it before a newly elected Congress
takes over in January.
On Wednesday, Bank of Canada Deputy Governor Lawrence
Schembri said uncertainty about NAFTA renegotiations is one of
the reasons the central bank has kept interest rates low,
because concern about U.S. trade policy is dragging down
business investment.
At 9:23 a.m. EDT (1323 GMT), the Canadian dollar
was little changed at C$1.2793 to the greenback, or 78.17 U.S.
cents. The currency touched its strongest since May 11 at
C$1.2749.
Foreign investment in Canadian securities picked up in March
as investors purchased money market instruments, even as they
reduced their bond holdings for a fourth consecutive month,
Statistics Canada said.
Canadian government bond prices were mixed across a steeper
yield curve in sympathy with U.S. Treasuries. The two-year
price rose 0.5 Canadian cent to yield 2.056 percent
and the 10-year declined 13 Canadian cents to yield
2.516 percent.
The 10-year yield touched its highest intraday level since
April 2014 at 2.522 percent.
(Reporting by Fergal Smith; editing by Jonathan Oatis)